(New York) - In remarks
to energy industry analysts today, Thomas G. Boren, President and
CEO of PG&E Corporation's (NYSE: PCG) National Energy Group (NEG),
reported on the unit's performance and on initiatives to continue
to grow the business. He said the unit remains on target to deliver
30 percent of Corporation's total earnings by 2002. He credited
the unit's strong performance in the first two quarters of 2000,
in part, to the recently completed consolidation of the business
and successful efforts to sharpen the NEG's strategy. Boren emphasized
that the unit continues to take steps to boost its performance further.
Specifically, Boren said
the NEG is focused on extracting greater value from its energy trading
operations, accelerating the growth in "megawatts controlled" either
through asset ownership or contractual arrangements, and enhancing
its ownership and management of strategic natural gas transportation
and storage assets.
Boren also said that as
the NEG pursues these objectives, it is aggressively working to
use its balance sheet and equity more efficiently, increasing capital
velocity to boost returns. Examples include using more innovative
asset ownership and management strategies such as tolling agreements,
expanding the NEG's use of sophisticated financial structures to
optimize leverage and risk, and monetizing assets and redeploying
capital to higher value opportunities.
Boren said the NEG's program
to develop new power plants continues to move forward with plants
under construction or in development in key regions, including the
West, the Northeast and the Midwest. These facilities represent
more than 15,700 megawatts of capacity, in addition to the 7,000
megawatts currently controlled by the NEG. The NEG is also building
its portfolio through new contractual arrangements, known as tolling
agreements, that give it rights to supply fuel to and sell the power
from facilities it does not own or operate, he said.
Achieving the NEG's overall
growth objective goes well beyond building new power plants and
pipelines, Boren said. He stressed the vital role the unit's energy
trading and marketing organization must play in executing the NEG's
strategy. The NEG trading and marketing group is expanding its role
beyond that of a support function to that of a driver for growth
through control of contractual assets, he said. The group is expanding
its portfolio, diversifying its resources with a blend of physical
and contractual energy assets, capturing efficiencies through e-business,
and developing new products, Boren said.
Boren's overview was followed
by remarks from senior members of the NEG management team. The presentations
highlighted the NEG's capabilities and strategies in core competencies
for success in the competitive market, including risk management,
market assessment and valuation, transaction evaluation, and asset
financing.
"The National Energy Group
has the strategy and the full spectrum of skills and resources it
takes to achieve its growth objectives and deliver solid, sustainable
results to shareholders," Boren said. "Our performance in 2000 is
the result of our focus and commitment to these goals, and a solid
foundation on which we will build going forward."
PG&E Corporation, with revenues
of more than $20 billion and operations in 21 states, markets energy
services and products throughout North America through its National
Energy Group. PG&E Corporation's businesses also include Pacific
Gas and Electric Company, the Northern and Central California utility
that deliver natural gas and electricity to one in every 20 Americans.